Whilst trying to figure out the php.ini problem I have gone back to look at MySQL. It seemed that the default configure does not include support for it.
So we re-compiled using this:
'./configure' '--prefix=/usr/local/lsws/lsphp5' '--with-mysqli' '--with-mcrypt' '--with-mysql=/usr' '--with-libdir=lib64' '--with-zlib' '--with-gd' '--enable-shmop' '--enable-track-vars' '--enable-sockets' '--enable-sysvsem' '--enable-sysvshm' '--enable-magic-quotes' '--enable-mbstring' '--with-iconv' '--with-litespeed'
With this, we have MySQL support now.
So it's just a matter of trying to figure out why php.ini is not loading....